MIRA INFORM REPORT

1. Summary Information

		Country	India
Company Name	STEEL AUTHORITY OF INDIA LIMITED	Principal Name 1	Mr. C S Verma
Status	Excellent	Principal Name 2	Mr. Anil Kumar Chaudhary
		Registration #	55-006454
Street Address	Ispat Bhawan, Lodhi Road, New Delhi – 110003
Established Date	24.01.1973	SIC Code	--
Telephone#	91-11-24367481 (14 lines)	Business Style 1	Manufacturing
Fax #	91-11-24367015	Business Style 2	--
Homepage	http://www.sail.co.in	Product Name 1	Steel and Steel Products
# of employees	101878 (Approximately)	Product Name 2	--
Paid up capital	Rs. 41,305,252,890/-	Product Name 3	--
Shareholders	Shareholding of Promoter and Promoter Group- 80.01%, Public Shareholding- 19.99%	Banking	Allahabad Bank
Public Limited Corp.	YES	Business Period	41 Years
IPO	YES	International Ins.	--
Public Enterprise	YES	Rating	Aa (77)
Related Company
Relation	Country	Company Name	CEO
Joint Venture	--	SAIL Bansal Service Centre Limited	--
Note	--

2. Summary Financial Statement

Balance Sheet as of	31.03.2013		(Unit: Indian Rs.)
Assets		Liabilities
Current Assets	148,236,400,000	Current Liabilities	132,478,600,000
Inventories	160,082,100,000	Long-term Liabilities	215,005,700,000
Fixed Assets	167,774,000,000	Other Liabilities	84,453,900,000
Deferred Assets	0,000	Total Liabilities	431,938,200,000
Invest& other Assets	366,092,100,000	Retained Earnings	368,941,100,000
		Net Worth	410,246,400,000
Total Assets	842,184,600,000	Total Liab. & Equity	842,184,600,000
Total Assets (Previous Year)	763,370,200,000
P/L Statement as of	31.03.2013		(Unit: Indian Rs.)
Sales	445,982,600,000	Net Profit	21,703,500,000
Sales(Previous yr)	463,417,900,000	Net Profit(Prev.yr)	35,427,200,000

MIRA INFORM REPORT

Report Date :

02.06.2014

IDENTIFICATION DETAILS

Name :	STEEL AUTHORITY OF INDIA LIMITED BHILAI STEEL (A PLANT OF STEEL AUTHORITY OF INDIA LIMITED)

Registered Office :	Ispat Bhawan, Lodhi Road, New Delhi – 110003

Country :	India

Financials (as on) :	31.03.2013

Date of Incorporation :	24.01.1973

Com. Reg. No.:	55-006454

Capital Investment / Paid-up Capital :	Rs. 41305.300 Millions

CIN No.: [Company Identification No.]	L27109DL1973GOI006454

TAN No.: [Tax Deduction & Collection Account No.]	DELS20873G / DELS27448B / DELS23314E / DELS23327D / DELS22351A / DELS21126A / DELS06268D / DELS23804E / DELS22350G / DELS22349F / DELS21127B

PAN No.: [Permanent Account No.]	AAACS7062F / AAALS7062F / AAAC57062F

Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.

Line of Business :	Manufacturer of Steel and Steel Products.

No. of Employees :	101878 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

Aa (77)

RATING

STATUS

PROPOSED CREDIT LINE

71-85

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

Large

Maximum Credit Limit :	USD 1640000000

Status :	Excellent

Payment Behaviour :	Regular

Litigation :	Exist

Comments :	Subject is a Government of India company, having excellent track record. Directors are reported to be experienced and respectable businessmen. Fundamental of the company seems to be strong. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments. Company can be considered good for normal business dealings at usual trade terms and conditions.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – March 31, 2014

Country Name

Previous Rating

(31.12.2013)

Current Rating

(31.03.2014)

India

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

INDIAN ECONOMIC OVERVIEW

US investment bank Goldman Sachs has upgraded its outlook on Indian markets as it expects positive impact of the election cycle.

India’s economy may grow 4.7 % in the current financial year, lower than the official estimate of 4.9 %, Fitch Rating said. The global rating agency expects the economy to pick up in the next two financial years.

Global ratings agency Standard & Poor said increasing focus by India Inc on lowering debt is likely to improve their credit profiles.

Singapore (1.1 million Indian tourists in 2012), Thailand (one million), the United Arab Emirates ().98 million) and Malaysia ().82 million) emerged as the preferred holidays hotspots for Indians. The total figure is expected to increase to 1.93 million by 2017, according to the latest Eurmonitor international report.

There is a $29.34 bn outward foreign direct investment by domestic companies between April and January of 2013/14 which has seen some signs of recovery according to a Care Ratings report.

There are 264 number of new companies being set up every day on average during 2014. Most of them are registered in Mumbai. India had 1.38 million registered companies at the end of January, 2014.

Twitter like messaging service Weibo Corporation has filed to raise $ 500 million via a US initial public offering. Alibaba, which owns a stake in Weibo is expected to raise about $ 15 billion New York this year in the highest profile Internet IPO since Facebook’s in 2012.

Bharti Airtel has raised Rs.2,453.2 crore (350 million Swiss Francs) by selling six-year bonds at a coupon rate of three per cent and maturing in 2020. This is the largest ever bond offering by an Indian company in Swiss Francs. Bharat Petroleum Corporation raised 175 million Swiss Francs by selling five year bonds at 2.98 % coupon rate in February.

Indian Oil Corporation plans to invest Rs 7650 crore in setting up a petrochemical complex at its almost complete Paradip refinery in Odhisha in three to four years. The company board is set to consider the setting up of a 700000 tonne per annum polypropylene plant at an estimated cost at Rs.3150 crore.

Global chief information officers at gathering in Bangalore in April to meet Indian startups at an event called Tech50 Watchout for Little Eye Labs-Facebook type deals in the making.

EXTERNAL AGENCY RATING

Rating Agency Name	CARE
Rating	Long-Term Bond Programme – I : AAA
Rating Explanation	Highest credit quality and lowest credit risk.
Date	July 02, 2013

Rating Agency Name	CARE
Rating	Short term CP/ICD Programme : A1+
Rating Explanation	Very strong degree of safety and lowest credit risk.
Date	July 02, 2013

RBI DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2012.

INFORMATION DENIED

Management Non-Corporative (91-7882854557)

LOCATIONS

Registered/ Corporate Office :	Ispat Bhawan, Lodhi Road, New Delhi – 110003, India
Tel. No.:	91-11-24367481 (14 lines)
Fax No.:	91-11-24367015
E-Mail :	secy.sail@sailex.com mcjsail@gmail.com drgeeta.sharma@sailex.com
Website :	http://www.sail.co.in

Factory :	Integrated Steel Plants · Bhilai Steel Plant, Chhattisgarh – 490001, India · Durgapur Steel Plant – 713203, West Bengal, India · Rourkela Steel Plant – 769011, Orissa, India · Bokaro Steel Plant – 827001, Jharkhand, India · P. O. Hinoo, Ranchi – 834002, Bihar, India Special Steel Plants · Alloy Steel Plants, Durgapur – 713208, West Bengal, India · Salem Steel Plant – 636013, Tamilnadu, India · Visvesvaraya Iron and Steel Plant, Bhadravati, Karnataka, India

Sail Refractory Unit :	Bokaro Steel City – Bokaro – 827004, Jharkhand

DIRECTORS

AS ON 31.03.2013

Name :	Mr. C S Verma
Designation :	Chairman

FUNCTIONAL DIRECTORS
Name :	Mr. Anil Kumar Chaudhary
Designation :	Director (Finance)

Name :	Mr. S. S. Mohanty
Designation :	Director (Technical and Commercial (Additional Charge))

Name :	Mr. H. S. Pati
Designation :	Director (Personnel)

Name:	Mr. T. S. Suresh
Designation :	Director (Projects and Business Planning )
Tel No.:	91-11-24362897

Name:	Mr. Kalyan Maity
Designation :	Director (Raw Materials and Logistics)

GOVERNMENT DIRECTORS
Name :	Mr. Vinod Kumar Thakral
Designation :	Additional Secretary and Financial Adviser Ministry of Steel, Government of India

Name :	Mr. Upendra Prasad Singh
Designation :	Joint Secretary Ministry of Steel, Government of India

INDEPENDENT DIRECTORS
Name :	Dr. Atmanand
Designation :	Independent Director

Name :	Mr. A K Goswami
Designation :	Independent Director

Name :	Dr. Jagdish Khattar
Designation :	Independent Director

Name :	Prof. Subrata Chaudhuri
Designation :	Independent Director

Name :	Mr. P. K. Sengupta
Designation :	Independent Director

Name :	Mr. P. C. Jha
Designation :	Independent Director

Name:	Dr. Isher Judge Ahluwalia
Designation :	Independent Director

Name:	Mr. Sujit Banerjee
Designation :	Independent Director

Name:	Mr. Arun Kumar Srivastava
Designation :	Independent Director

Name:	J.M. Mauskar
Designation :	Independent Director

KEY EXECUTIVES

CHIEF EXECUTIVE OFFICERS (PERMANENT INVITEES)
Bhilai Steel Plant :	Mr. S. Chandrasekaran

IISCO Steel Plant	Mr. N. Kothari

Rourkela Steel Plant :	Mr. G. S. Prasad

Bokaro Steel Plant :	Mr. Anutosh Maitra

Durgapur Steel Plant :	Mr. P. K. Bajaj

Name:	Mr. M.C. Jain
Designation :	Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 31.03.2014

Category of Shareholder	Total No. of Shares	As a %
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Central Government / State Government(s)	3304293713	80.01
Sub Total	3304293713	80.01
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	3304293713	80.01
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	29263779	0.71
Financial Institutions / Banks	129513499	3.14
Insurance Companies	292953452	7.09
Foreign Institutional Investors	241684645	5.85
Sub Total	693415375	16.79
(2) Non-Institutions
Bodies Corporate	19146284	0.46
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 Million	87704879	2.12
Individual shareholders holding nominal share capital in excess of Rs. 0.100 Million	16525520	0.40
Any Others (Specify)	8985333	0.22
Non Resident Indians	4805700	0.12
Trust & Foundation	4179633	0.10
Sub Total	132362016	3.20
Total Public shareholding (B)	825777391	19.99
Total (A)+(B)	4130071104	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	0	0.00
(1) Promoter and Promoter Group	0	0.00
(2) Public	454185	0.00
Sub Total	454185	0.00
Total (A)+(B)+(C)	4130525289	0.00

BUSINESS DETAILS

Line of Business :

Manufacturer of Steel and Steel Products.

Products/ Services :

ITC Code No.	Product Descriptions
720837.00/720838.00/720839.00	Hot Rolled Plates
720719.05 / 720719.00	Semi-Finished Products
730210.01	Railway Rails
720837 90/ 720838 90/ 720839 90	Hot Rolled Coils
7208.5110/ 7208.5210	Plates
730210 10/ 730210 90	Rails

PRODUCTION STATUS (AS ON 31.03.2011)

Particulars	Unit	Installed Capacity	Actual Production
MAIN STEEL PLANTS
Pig Iron	Tonnes	2397000	260829
Crude Steel (i)	Tonnes	12487000	13453059
Saleable Steel	Tonnes	10740000	12324973

ALLOY STEELS PLANTS
Pig Iron	Tonnes	58000	2341
Crude Steel	Tonnes	352000	308733
Saleable Steel	Tonnes	457000	550238

NOTES:

1) Crude Steel installed capacity is in terms of solid steel as per International Iron and steel Institute.

2) "Licensed Capacity" Not applicable (N.A.) in terms of Government of India Notification No.S.O.477 (E) dated 25th July, 1991.

GENERAL INFORMATION

No. of Employees :

101878 (Approximately)

Bankers :

· Allahabad Bank

· Andhra Bank

· Australia and New Zealand Banking Group Limited

· Axis Bank Limited

· Bank of America

· Bank of Baroda

· Bank of India

· Bank of Maharashtra

· Bank of Tokyo-Mitsubishi UFJ Limited

· Baraclays Bank PLC

· BNP Paribas

· Canara Bank

· Central Bank of India

· Citi Bank

· Corporation Bank

· Credit Agricole Corporate and Investment Bank

· Dena Bank

· Deutsche Bank

· Development Bank of Singapore

· Federal Bank Limited

· HDFC Bank Limited

· ICICI Bank Limited

· IDBI Bank

· Indian Bank

· Indian Overseas Bank

· IndusInd Bank Limited

· ING Vysya Bank Limited

· Jammu and Kashmir Bank Limited

· JP Chase Morgan

· Kotak Mahindra Bank Limited

· Mizuho Corporate Bank

· Oriental Bank of Commerce

· Punjab and Sind Bank

· Punjab National Bank

· Royal Bank of Scotland

· Standard Chartered Bank

· State Bank of Bikaner and Jaipur

· State Bank of Hyderabad

· State Bank of India

· State Bank of Mysore

· State Bank of Patiala

· State Bank of Travancore

· Sumitomo Mitsui Banking Corporation

· Syndicate Bank

· UCO Bank

· Union Bank of India

· United Bank of India

· Vijaya Bank

· Yes Bank Limited

Facilities :

Secured Loans	31.03.2013	31.03.2012
	(Rs. In Millions)
LONG TERM BORROWINGS
Taxable Redeemable Non-convertible Bonds	80150.000	69132.000
Term Loans from Banks	0.000	4500.000
SHORT TERM BORROWINGS
Loans repayable on demand
- From banks	7311.600	1187.100

Total	87461.600	74819.100
SHORT TERM BORROWINGS (a) Secured by hypothecation of all Current Assets. (b) The Company does not have any continuing default in repayment of Loans and interest on the Balance Sheet date.


Banking Relations :	--

Financial Institution :	· IDBI Trusteeship Services Limited Asian Building, Ground Floor, 17, R. Kamani Marg, Ballard Estate, Mumbai - 400001, Maharashtra, India

Statutory Auditors :
Name :	S.K. Mittal and Company Chartered Accountants O.P. Totla and Company Chartered Accountants B.N. Misra and Company Chartered Accountants

Joint Venture :	· SAIL Bansal Service Centre Limited · Mjunction Services Limited · UEC-SAIL Information Technology Limited · Romelt SAIL (India) Limited · N.E Steel and Galvanising Private Limited · Bhilai Jaypee Cement Limited · Bokaro Jaypee Cement Limited · S and T Mining Company Private Limited · SAIL Kobe Iron India Private Limited · TMTSAL SAIL JV Limited · SAL SAIL JVC Limited

CAPITAL STRUCTURE

AS ON 31.03.2013

Authorised Capital :

No. of Shares	Type	Value	Amount

5000000000	Equity Shares	Rs.10/- each	Rs. 50000.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount

4130525289	Equity Shares	Rs.10/- each	Rs. 41305.300 Millions

Note

(i) Reconciliation of equity shares at the end of the year

Particulars	31st March, 2013
Particulars	Numbers	Rs. In millions
– Equity shares with voting rights
Shares outstanding at the beginning of the year	4129934944	41299.349
Shares Issued / Converted into shares with Voting Rights during the year #	136160	1.362
Shares bought back during the year	--	--
Shares outstanding at the end of the year	4130071104	41300.711

– Equity shares without voting rights *
Shares outstanding at the beginning of the year	590345	5.903
Shares Issued during the year
Shares Issued / Converted into shares with Voting Rights during the year #	136160	1.362
Shares outstanding at the end of the year	454185	4.542

* Represented by one Global Depository Receipt (GDR) issued @ US$ 29.55 each for an aggregate amount of US $ 125 million

# Includes 124744 shares issued to shareholders of MEL on merger with the Company and 23900 shares arising out of conversion of GDR into ordinary shares during the previous year.

(ii) All shares rank equally with regard to the repayment of capital in the event of liquidation of the Company.

(iii) The Company does not have a holding Company

(iv) Details of the shareholders holding more than 5% of the shares in the Company

Particulars

31st March, 2013

No. of Shares held

% of Holding

President of India

3304293713

80.00

(v) 1,24,43,82,900 equity shares of Rs.10 each (net of adjustment on reduction of capital) were allotted as fully paid up for consideration other than cash

(vi) The Company has neither issued bonus shares nor has bought back any shares during the last 5 years

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS			31.03.2013
I. EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital			41305.300
(b) Reserves & Surplus			368941.100
(c) Money received against share warrants			0.000

(2) Share Application money pending allotment			0.000
Total Shareholders’ Funds (1) + (2)			410246.400

(3) Non-Current Liabilities
(a) long-term borrowings			134855.500
(b) Deferred tax liabilities (Net)			17285.300
(c) Other long term liabilities			12711.200
(d) long-term provisions			42041.600
Total Non-current Liabilities (3)			206893.600

(4) Current Liabilities
(a) Short term borrowings			80150.200
(b) Trade payables			33220.400
(c) Other current liabilities			86547.000
(d) Short-term provisions			25127.000
Total Current Liabilities (4)			225044.600

TOTAL			842184.600

II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets			152346.300
(ii) Intangible Assets			15427.700
(iii) Capital work-in-progress			358908.500
(iv) Intangible assets under development			0.000
(b) Non-current Investments			7183.600
(c) Deferred tax assets (net)			0.000
(d) Long-term Loan and Advances			31651.700
(e) Other Non-current assets			507.000
Total Non-Current Assets			566024.800

(2) Current assets
(a) Current investments			0.000
(b) Inventories			160082.100
(c) Trade receivables			44241.800
(d) Cash and cash equivalents			38503.500
(e) Short-term loans and advances			9906.900
(f) Other current assets			23425.500
Total Current Assets			276159.800

TOTAL			842184.600

SOURCES OF FUNDS		31.03.2012	31.03.2011
SHAREHOLDERS FUNDS
1] Share Capital		41305.300	41304.000
2] Share Application Money		0.000	0.000
3] Reserves & Surplus		356807.900	329390.700
4] (Accumulated Losses)		0.000	0.000
NETWORTH		398113.200	370694.700
LOAN FUNDS
1] Secured Loans		74819.100	116457.100
2] Unsecured Loans		86153.000	74100.900
TOTAL BORROWING		160972.100	190558.000
DEFERRED TAX LIABILITIES		16444.800	14910.700

TOTAL		575530.100	576163.400

APPLICATION OF FUNDS

FIXED ASSETS [Net Block]		171273.800	150585.100
Capital work-in-progress		280491.400	220753.100

INVESTMENT		6849.400	6841.400
DEFERREX TAX ASSETS		0.000	0.000

CURRENT ASSETS, LOANS & ADVANCES
	Inventories	137423.700	113027.900
	Sundry Debtors	47613.200	41302.700
	Cash & Bank Balances	64157.000	174800.900
	Other Current Assets	21670.000	24142.500
	Loans & Advances	33891.700	29376.300
Total Current Assets		304755.600	382650.300
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditor	31904.200	31865.400
	Other Current Liabilities	97713.600	94049.800
	Provisions	58222.300	58751.300
Total Current Liabilities		187840.100	184666.500
Net Current Assets		116915.500	197983.800

MISCELLANEOUS EXPENSES		0.000	0.000

TOTAL		575530.100	576163.400

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2013	31.03.2012	31.03.2011
	SALES
		Income	445982.600	463417.900	433073.600
		Other Income	9644.400	16229.800	14858.800
		TOTAL (A)	455627.000	479647.700	447932.400

Less	EXPENSES
		Cost of Materials Consumed	211984.800	230208.200	202479.100
		Purchase of Stock in Trade	32.100	48.800	42.200
		Employee Benefits Expense	86372.000	79320.500	76233.300
		Other Expenses	121608.100	107073.700	93447.000
		Exceptional Items	2293.200	2620.200	[1254.300]
		Adjustments pertaining to Earlier Years	(415.300)	105.400	[1037.000]
		Changes in Inventories of Finished Goods, Work in Progress and Stock in Trade	(20160.900)	[13685.100]	[13526.700]
		TOTAL (B)	401714.000	405691.700	356383.600

	PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		53913.000	73956.000	91548.800

Less	FINANCIAL EXPENSES (D)		7476.600	6777.000	4747.700

	PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		46436.400	67179.000	86801.100

Less/ Add	DEPRECIATION/ AMORTISATION (F)		14029.800	15670.300	14858.000

	PROFIT/ (LOSS) BEFORE TAX (E-F) (G)		32406.600	51508.700	71943.100

Less	TAX (H)		10703.100	16081.500	22895.700

	PROFIT/ (LOSS) AFTER TAX (G-H) (I)		21703.500	35427.200	49047.400

	EARNINGS IN FOREIGN CURRENCY
		Export of goods(Calculated on FOB basis)	11579.500	12300.100	9804.600
	TOTAL EARNINGS		11579.500	12300.100	9804.600

	IMPORTS
		Raw Materials	128862.600	160738.000	126773.900
		Stores, Spares and Components	5083.500	4251.300	4566.200
		Capital Goods	13692.200	12269.600	23520.200
	TOTAL IMPORTS		147638.300	177258.900	154860.300

	Earnings / (Loss) Per Share (Rs.)		5.25	8.58	11.87

QUARTERLY RESULTS

PARTICULARS	30.06.2013	30.09.2013	31.12.2013	31.03.2014
Type	1^st Quarter	2^nd Quarter	3^rd Quarter	4^th Quarter
Net Sales	102679.100	115355.100	114587.200	135092.100
Total Expenditure	93006.500	106686.200	103267.400	128046.700
PBIDT (Excl OI)	9672.600	8668.900	11319.800	7045.400
Other Income	2261.700	1527.100	2088.000	1751.100
Operating Profit	11934.300	10196.000	13407.800	8796.500
Interest	1918.200	2164.800	2467.700	3125.700
Exceptional Items	(878.800)	9881.200	199.200	0.000
PBDT	9137.300	17912.400	11139.300	6060.400
Depreciation	3928.500	3988.000	4087.400	0.000
Profit Before Tax	5208.800	13924.400	7051.900	6060.400
Tax	699.700	2120.500	1725.900	1534.600
Provisions and contingencies	0.000	0.000	0.000	0.000
Profit After Tax	4509.100	11803.900	5326.000	4525.800
Extraordinary Items	0.000	0.000	0.000	0.000
Prior Period Expenses	0.000	0.000	0.000	0.000
Other Adjustments	0.000	0.000	0.000	0.000
Net Profit	4509.100	11803.900	5326.000	4525.800

KEY RATIOS

PARTICULARS		31.03.2013	31.03.2012	31.03.2011
PAT / Total Income	(%)	4.76	7.39	10.95

Net Profit Margin (PBT/Sales)	(%)	7.27	11.11	16.61

Return on Total Assets (PBT/Total Assets}	(%)	6.81	10.82	13.49

Return on Investment (ROI) (PBT/Networth)		0.08	0.13	0.19

Debt Equity Ratio (Total Debt/Networth)		0.52	0.40	0.51

Current Ratio (Current Asset/Current Liability)		1.23	1.62	2.07

FINANCIAL ANALYSIS

[all figures are in Rupees Millions]

YEAR-ON-YEAR GROWTH

Year on Year Growth	31.03.2011	31.03.2012	31.03.2013
	(Rs. in Millions)	(Rs. in Millions)	(Rs. in Millions)
SALES	433073.600	463417.900	445982.600
		7.007	(3.762)

NET PROFIT MARGIN

Net Profit Margin	31.03.2011	31.03.2012	31.03.2013
	(Rs. in Millions)	(Rs. in Millions)	(Rs. in Millions)
Sales	433073.600	463417.900	445982.600
Profit	49047.400	35427.200	21703.500
	11.33%	7.64%	4.87%

LOCAL AGENCY FURTHER INFORMATION

Sr. No.	Check List by Info Agents	Available in Report (Yes / No)
1]	Year of Establishment	Yes
2]	Locality of the firm	Yes
3]	Constitutions of the firm	Yes
4]	Premises details	No
5]	Type of Business	Yes
6]	Line of Business	Yes
7]	Promoter's background	No
8]	No. of employees	Yes
9]	Name of person contacted	No
10]	Designation of contact person	No
11]	Turnover of firm for last three years	Yes
12]	Profitability for last three years	Yes
13]	Reasons for variation <> 20%	--
14]	Estimation for coming financial year	No
15]	Capital in the business	Yes
16]	Details of sister concerns	Yes
17]	Major suppliers	No
18]	Major customers	No
19]	Payments terms	No
20]	Export / Import details (if applicable)	No
21]	Market information	--
22]	Litigations that the firm / promoter involved in	Yes
23]	Banking Details	Yes
24]	Banking facility details	Yes
25]	Conduct of the banking account	--
26]	Buyer visit details	--
27]	Financials, if provided	Yes
28]	Incorporation details, if applicable	Yes
29]	Last accounts filed at ROC	Yes
30]	Major Shareholders, if available	Yes
31]	Date of Birth of Proprietor/Partner/Director, if available	No
32]	PAN of Proprietor/Partner/Director, if available	No
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	Yes

LITIGATION DETAILS

IN THE HIGH COURT OF DELHI AT NEW DELHI

ITA 342/2013

COMMISSIONER OF INCOME TAX-III

..... Appellant

Through Mr. Sanjeev Rajpal, Sr. Standing Counsel.

Versus

STEEL AUTHORITY OF INDIA LIMITED

..... Respondent

Through Ms. Monika Garg, Advocate.

CORAM:

HON'BLE MR. JUSTICE SANJIV KHANNA

HON'BLE MR. JUSTICE SANJEEV SACHDEVA

O R D E R

11.10.2013

Having heard learned counsel for the parties, we admit the following substantial questions of law for decision:

(1) Whether the Income Tax Appellate Tribunal was correct in deleting the addition of Rs.6.580 Millions made to the income of the respondent rejecting its claim for depreciation on water supply and sewage treatment plant?

(2) Whether the Income Tax Appellate Tribunal was correct in deleting nthe addition of Rs.144.500 Millions made to the income of the respondent on account of disallowance of fluctuation in the foreign exchange?

(3) Whether the Income Tax Appellate Tribunal was correct in deleting the addition of Rs.218.600 Millions made to income of the respondent rejecting its claim for provision for long service award during the relevant year??

With regard to depreciation on computer fibre network systems, we do not think any substantial question of law arises for consideration as fibre network system is a computer peripheral as held by the tribunal and depreciation at the rate of 60% is applicable to computer and computer peripherals.

Filing of printed paper book is dispensed with. Parties are, however, given liberty to file documents/papers, which were filed before the authorities/tribunal in accordance with Delhi High Court Rules.

To be listed in due course along with connected appeals.

SANJIV KHANNA, J.

SANJEEV SACHDEVA, J.

OCTOBER 11, 2013

VKR

INDEX OF CHARGES

S.NO.	CHARGE ID	DATE OF CHARGE CREATION/MODIFICATION	CHARGE AMOUNT SECURED	CHARGE HOLDER	ADDRESS	SERVICE REQUEST NUMBER (SRN)
1	10445797	01/08/2013	8,000,000,000.00	IDBI TRUSTEESHIP SERVICES LIMITED	ASIAN BUILDING, GROUND FLOOR, 17, R. KAMANI MARG, BALLARD ESTATE, MUMBAI - 400001, MAHARASHTRA, INDIA	B82978529
2	10407999	18/04/2013 *	5,000,000,000.00	IDBI TRUSTEESHIP SERVICES LIMITED	ASIAN BUILDING, GROUND FLOOR, 17, R. KAMANI MARG, BALLARD ESTATE, MUMBAI - 400001, MAHARASHTRA, INDIA	B74443508
3	10395101	18/04/2013 *	3,000,000,000.00	IDBI TRUSTEESHIP SERVICES LIMITED	ASIAN BUILDING, GROUND FLOOR, 17, R. KAMANI MARG, BALLARD ESTATE, MUMBAI - 400001, MAHARASHTRA, INDIA	B74443938
4	10373662	18/04/2013 *	3,600,000,000.00	IDBI TRUSTEESHIP SERVICES LIMITED	ASIAN BUILDING, GROUND FLOOR, 17, R. KAMANI MARG, BALLARD ESTATE, MUMBAI - 400001, MAHARASHTRA, INDIA	B74444290
5	10322416	16/05/2012 *	4,000,000,000.00	IDBI TRUSTEESHIP SERVICES LIMITED	ASIAN BUILDING, GROUND FLOOR, 17, R. KAMANI MARG, BALLARD ESTATE, MUMBAI - 400001, MAHARASHTRA, INDIA	B40010092
6	10322417	16/05/2012 *	4,550,000,000.00	IDBI TRUSTEESHIP SERVICES LIMITED	ASIAN BUILDING, GROUND FLOOR, 17, R. KAMANI MARG, BALLARD ESTATE, MUMBAI - 400001, MAHARASHTRA, INDIA	B40013989
7	10229692	12/08/2010 *	5,450,000,000.00	IDBI TRUSTEESHIP SERVICES LIMITED	ASIAN BUILDING, GROUND FLOOR, 17, R. KAMANI MARG, BALLARD ESTATE, MUMBAI - 400001, MAHARASHTRA, INDIA	A93701563
8	10230323	12/08/2010 *	6,600,000,000.00	IDBI TRUSTEESHIP SERVICES LIMITED	ASIAN BUILDING, GROUND FLOOR, 17, R. KAMANI MARG, BALLARD ESTATE, MUMBAI - 400001, MAHARASHTRA, INDIA	A93700938
9	10209543	28/04/2010 *	2,420,000,000.00	IDBI TRUSTEESHIP SERVICES LIMITED	ASIAN BUILDING, GROUND FLOOR, 17, R. KAMANI MARG, BALLARD ESTATE, MUMBAI - 400001, MAHARASHTRA, INDIA	A85166627
10	10211081	28/04/2010 *	4,500,000,000.00	IDBI TRUSTEESHIP SERVICES LIMITED	ASIAN BUILDING, GROUND FLOOR, 17, R. KAMANI MARG, BALLARD ESTATE, MUMBAI - 400001, MAHARASHTRA, INDIA	A85166759
11	10207558	23/02/2010	6,000,000,000.00	AXIS BANK LIMITED	ASIAN BUILDING, GROUND FLOOR, 17, R. KAMANI MARG, BALLARD ESTATE, MUMBAI - 400001, MAHARASHTRA, INDIA	A80960453
12	10199378	16/01/2010	1,680,000,000.00	IDBI TRUSTEESHIP SERVICES LIMITED	ASIAN BUILDING, GROUND FLOOR, 17, R. KAMANI MARG, BALLARD ESTATE, MUMBAI - 400001, MAHARASHTRA, INDIA	A77846889
13	10199380	16/01/2010	1,500,000,000.00	IDBI TRUSTEESHIP SERVICES LIMITED	ASIAN BUILDING, GROUND FLOOR, 17, R. KAMANI MARG, BALLARD ESTATE, MUMBAI - 400001, MAHARASHTRA, INDIA	A77848109
14	10199381	16/01/2010	3,350,000,000.00	IDBI TRUSTEESHIP SERVICES LIMITED	ASIAN BUILDING, GROUND FLOOR, 17, R. KAMANI MARG, BALLARD ESTATE, MUMBAI - 400001, MAHARASHTRA, INDIA	A77847499
15	10187049	10/11/2009	1,500,000,000.00	IDBI TRUSTEESHIP SERVICES LIMITED	ASIAN BUILDING, GROUND FLOOR, 17, R. KAMANI MARG, BALLARD ESTATE, MUMBAI - 400001, MAHARASHTRA, INDIA	A73811770
16	10187050	10/11/2009	7,000,000,000.00	IDBI TRUSTEESHIP SERVICES LIMITED	ASIAN BUILDING, GROUND FLOOR, 17, R. KAMANI MARG, BALLARD ESTATE, MUMBAI - 400001, MAHARASHTRA, INDIA	A73812182
17	10187051	10/11/2009	3,000,000,000.00	IDBI TRUSTEESHIP SERVICES LIMITED	ASIAN BUILDING, GROUND FLOOR, 17, R. KAMANI MARG, BALLARD ESTATE, MUMBAI - 400001, MAHARASHTRA, INDIA	A73812729
18	10181866	06/10/2009	6,500,000,000.00	UNITED BANK OF INDIA	12/4, ASAF ALI ROAD, NEW DELHI - 110002, INDIA	A71934996
19	10178438	19/09/2009	8,250,000,000.00	IDBI TRUSTEESHIP SERVICES LIMITED	ASIAN BUILDING, GROUND FLOOR, 17, R. KAMANI MARG, BALLARD ESTATE, MUMBAI - 400001, MAHARASHTRA, INDIA	A70730296
20	10172177	01/05/2012 *	5,250,000,000.00	IDBI TRUSTEESHIP SERVICES LIMITED	ASIAN BUILDING, GROUND FLOOR, 17, R. KAMANI MARG, BALLARD ESTATE, MUMBAI - 400001, MAHARASHTRA, INDIA	B39399712
21	10172179	01/05/2012 *	9,500,000,000.00	IDBI TRUSTEESHIP SERVICES LIMITED	ASIAN BUILDING, GROUND FLOOR, 17, R. KAMANI MARG, BALLARD ESTATE, MUMBAI - 400001, MAHARASHTRA, INDIA	B39435912
22	10117687	27/03/2007	160,000,000.00	CENTRAL BANK OF INDIA	MOMINPUR BRANCH, KOLKATA - 700023, WEST BENGAL, INDIA	A24332082
23	80048211	04/07/2013 *	135,000,000,000.00	STATE BANK OF INDIA	CORPORATE ACCOUNTS GROUP BRANCH, JAWAHAR VYAPAR BHAWAN, 11 & 12 FLOOR, TOLSTOY MARG, NEW DELHI - 110001, INDIA	B82452848
24	80065021	01/05/2012 *	582,000,000.00	IDBI TRUSTEESHIP SERVICES LIMITED	ASIAN BUILDING, GROUND FLOOR, 17, R. KAMANI MARG, BALLARD ESTATE, MUMBAI - 400001, MAHARASHTRA, INDIA	B39400213
25	90043261	06/07/2004 *	65,000,000.00	BANK OF MAHARASHTRA	LEGAL DEPARTMENT, LOKMANGAL; 1501; SHIVAJINAGAR, PUNE - 411005, MAHARASHTRA, INDIA	-
26	90062090	06/11/2000	350,000,000.00	STATE BANK OF BIKANER & JAIPUR	NEW DELHI HOUSE, BARAKHMBA ROAD, NEW DELHI, INDIA	-
27	90061463	30/05/2001 *	622,000,000.00	STATE BANK OF INDIA	DELHI, NEW DELHI, DELHI, INDIA	-
28	90061442	21/03/2001 *	6,220,000,000.00	STATE BANK OF INDIA	DELHI, NEW DELHI, DELHI, INDIA	-
29	90061118	10/12/2001 *	2,000,000,000.00	BANK OF MAHARASHTRA	LOKMANGAL , 1501, SHIVAJI NAGAR, PUNE - 411005, MAHARASHTRA, INDIA	-
30	80032318	20/12/1993	110,000,000.00	STATE BANK OF INDIA	BOKARO STEEL CITY BRANCH, BOKARO - 827004, JHARKHAND, INDIA	-
31	90263457	19/12/1998 *	245,000,000.00	STATE BANK OF INDIA	BOKARO STEEL CITY BRANCH, BOKARO - 827004, JHARKHAND, INDIA	-

* Date of charge modification

UNSECURED LOANS

Unsecured Loans	31.03.2013	31.03.2012
	(Rs. In Millions)
LONG TERM BORROWINGS
Taxable Redeemable Non-convertible Bonds	0.000	160.000
Term Loans	52663.200	40031.500
Others	2042.300	2043.100
SHORT TERM BORROWINGS
Other Loans and Advances
Other Loans	4000.000	6400.700
Commercial Paper	0.000	6675.800
Foreign Currency Loans	68838.600	30841.900

Total	127544.100	86153.000

FINANCIAL REVIEW

The Company achieved a turnover of Rs.493500.000 Millions during the Financial Year 2012-13 which was almost at the same level as that of last year (Rs.503480.000 Millions). The profit after tax of the Company for the Financial Year 2012-13 was Rs.21703.500 Millions compared to Rs.35427.200 Millions in the previous Financial Year. Net profit was down largely due to the lower Net Sales Realization resulting from a subdued market. Higher usage of external inputs like BF Coke and pellets and higher salary and wages were other key factors impacting profitability adversely.

SAIL continued its thrust on optimum utilisation of funds by better fund management. This included replacement of high cost short term loans with low cost debts, timely Repayment of loans including interest, strategic parking of surplus funds with scheduled banks, actions for future fund raising etc. to meet their growth objectives. Further, the Company hedged the foreign currency risk on Buyer's Credit and repayment of External Commercial Borrowing depending on market conditions. The Company had liquid assets of Rs.34000.000 Millions as on 31st March, 2013 invested in short term deposits with scheduled banks against borrowings of Rs.215970.000 Millions as on 31st March, 2013. The debt equity ratio of the Company was 0.53:1 as on 31st March, 2013 as against 0.41:1 as on 31st March, 2012 which went up on account of increase in borrowings during the year to fund the ongoing capital expenditure.

The net worth of the Company improved from Rs.398110.000 Millions as on 31st March, 2012 to Rs.410250.000 Millions as on 31st March, 2013 and this helped in generation of internal resources for funding expansion plans of SAIL. During the Financial Year 2012-13, SAIL's relentless drive to fast track its modernization and expansion plan resulted in commissioning of projects worth Rs. 55000.000 Millions. A capital expenditure of Rs. 97310.000 Millions was made during the year.

The Company paid interim dividend @ 16% of the paid-up equity share capital during the year. The Board of Directors has further recommended a final dividend @ 4%, subject to approval of shareholders, thus making the total dividend @ 20% of the paid up equity share capital for the Financial Year 2012-13. A sum of Rs.1630.000 Millions has been transferred to the general reserves during the Financial Year 2012-13 (previous year Rs.2750.000 Millions).

PRODUCTION REVIEW

Notwithstanding the challenging market conditions in 2012-13 arising from demand stagnation, the Company produced 13.4 million tones (MT) of crude steel by operating at 103% of its capacity, marking an improvement of 1% over CPLY. In line with its long term objective of increasing the proportion of value added steel in the overall product basket of SAIL, the production of special steels was scaled up to 5 MT, up by 4% over last Financial Year. Best ever power generation of 690 MW was achieved during the Financial Year 2012-13, with a growth of 4% over last year. Improvement was also achieved in the production of Hot Metal, Finished Steel and Continuous Cast Steel with a growth of 1% each over last year.

SAIL plants have taken various initiatives to enhance production processes, by improving operational discipline and minimizing equipment downtime. This has led to a significant improvement in operating parameters, leading to best ever techno-economic efficiency. SAIL Plants recorded the best ever specific energy consumption of 6.68 Gcal/tcs, an improvement of 3% over last year. This was achieved, as production through energy efficient CC route went up by 1% as compared to last year. Lowest ever coke rate at 512 kg/thm was achieved, with an improvement of 1% over last year. This was possible primarily because of higher usage of CDI (Coal Dust Injection) at 54 kg/thm as compared to 51 kg/thm achieved last year. Best ever BF-Productivity of 1.58 T/m3/day was achieved, with an improvement of 5% over last year, by consistent operation of Blast furnaces at BSP, DSP

and RSP where 2%, 8% and 3% growth was achieved in BF-Productivity.

The Company has strived to enhance its product basket by developing several new products during the year. Bhilai Steel Plant developed special soft iron magnetic plates for the prestigious India-based Neutrino Observatory (INO) Project of Bhabha Atomic Research Centre (BARC). Their Plants at Bokaro and Salem started production of IS 2062 E450 and E 350 HR Coils, tailor-made for wagons used by the Indian Railways. For the petrochemicals industry, Bhilai and Rourkela developed a new grade of ASTM 537 plates, which finds application in pressure vessels. Another product which caters to petrochemical industry is the NACE quality plate developed by SAIL Bhilai. These crack-resistant plates are ideal for transportation of gases having high Hydrogen-Sulphide content. SAIL Bokaro came out with ultra high strength HR and CR steel with Mn-B, especially for auto body components, thereby enhancing their presence in that sector. Besides catering to large scale industry, their penetration also improved in the medium and small scale industries with 31 CrV3 grade billets rolled out in Durgapur Steel Plant for the first time in India; a product which finds a growing market among makers of spanners and hand tools.

Several initiatives have been undertaken for implementation of R and D Master Plan of SAIL. An exhaustive Master Plan for R and D was prepared aiming at integrating R and D activities towards business and operational goals of the Company. The implementation of this Master Plan; besides giving a competitive advantage to SAIL by improving efficiencies, reducing costs, meeting market demands and upgrading current steel technologies; will also help in gradually increasing R and D expenditure to a level of 1% of sales turnover, which is an international benchmark.

R and D Master Plan is envisaged to have positive impact on the existing operations through implementation of centralized and decentralized projects. Centralized projects consist of High Impact Projects (HIP) and Technology Mission Projects (TMP). The projects which are of common interest to all integrated steel Plants viz. coal and coke beneficiation, pelletisation, environmental projects etc. will come in the category of HIP, Development/acquisition of radically new technologies which are of strategic importance for SAIL viz. thin strip casting and inline rolling, CRGO etc. will be pursued through TM Projects. Under the decentralized category, all the Plants/Units of SAIL have Centres of Excellence (CoE) in selected areas/products. Centre of Excellence projects mainly focus on augmenting product volume and product attribute.

Centres of Excellence have been created at all plants and RDCIS. 13 projects have been identified as CoE Projects, 2 each at BSP, RSP, ISP and SSP and one each at BSL, DSP, ASP, VISL and RDCIS. These projects have taken shape in terms of formulation of objective, scope, duration, budget and deliverables. A few examples are better quality plates and rails at Bhilai, high performance Cold Rolled Sheets at Bokaro, CRNO and API pipes at RSP etc. Three HIPs are being pursued with specific objectives of beneficiation and pelletisation of iron ore at mines, assimilation of new technologies for coke oven, sinter making and blast furnace at ISP and identification of new uses of BF and BOF sludge and slag for improving solid waste utilisation. Under the Technology Mission (TM) projects, discussions have been initiated with technology suppliers for acquiring technology for Thin Slab Casting and Direct Rolling (TSCDR) and CRGO Steel production.

RAW MATERIALS

During the Financial Year 2012-13, total requirement of iron ore was met from captive sources. The Company's captive iron ore mines produced about 21.48 million tonnes. However, in case of coking coal, around 24% requirement was met from indigenous sources and balance through imports. During the Financial Year 2012-13, production in captive collieries of the Company was about 0.82 million tonnes. In case of fluxes, around 1.26 million tonnes of limestone and 0.96 million tonnes of dolomite was produced resulting in total production of 2.22 million tonnes from captive sources. For thermal coal, the Company depends entirely on purchases from Coal India Limited (CIL) except small quantity produced from captive mines.

During the Financial Year 2012-13, the Company got the final forest clearance for Bolani, Barsua and Stage-I forest clearance for Gua Iron Ore Mines. Environment clearance for the capacity expansion of Gua and Bolani Iron Ore Mines and renewal of Dhobil mine were also obtained from MoEF, Government of India (GoI). Two mining leases of Kuteshwar Limestone mines got renewed for further period of twenty years.

For ensuring regular supplies of iron ore, capacities of existing iron ore mines are being expanded and new iron ore mines are being developed. In addition, new iron ore deposits in the States of Rajasthan, Chhattisgarh, MP, Maharashtra, Odisha and Karnataka are being explored.

For improving coking coal security, the Company is also making efforts for development of new coking coal blocks at Tasra and Sitanala. At Tasra Coal Block, Letter of Acceptance (LoA) has been issued to the M/s Lanco Infratech on 26th July'13 for development of 4 MTPA (ROM) coal capacity mine through open cast mining and production of washed coal through establishing a washery of 3.5 MTPA input capacity and further, setting up of 200-300 MW Power Plant through JV route based on secondary product available from Tasra Washery. Production is likely to start by mid 2015 after completing pre-development activities such as land acquisition, RandR, setting up infrastructure like Coal Handling Plant, Heavy Earth Moving Machineries (CHP, HEMM), etc. M/s Lanco Infratech was selected as the H-I bidder (on Net Present Value basis) for development of Tasra coking coal block as Mine developer cum operator (MDO).

For allotment of new thermal coal blocks applications have been submitted to Ministry of Coal, GoI and for coking coal Ministry of Coal, GoI has been approached for allotment of 2-3 coking coal blocks under Government dispensation route.

SALES AND MARKETING REVIEW

· SAIL achieved a total sales volume of 11.35 million tonnes during the Financial Year 2012-13. Exports during the year at 0.368 million tonnes achieved 10.1% growth over previous year. Major categories where growth was recorded in home sales included: HR Coils: 2.1%, CR Coils/Sheets: 4.6%, GP/GC: 5.3%, Wire Rods: 1.7% and Electrical Steel Sheets: 16.8%. New were also set in supplies of Wheels to Indian Railways during the year.

· Highest ever sales of LPG grade HR Coils were achieved at 2.07 lac tonnes during the Financial Year 2012-13 registering 6.8% growth over the previous best achieved during 2011-12.

· Supplies were started to rural dealers appointed under "SAIL Rural Dealership Scheme" which was launched in the year 2011-12 with the primary objective of meeting the steel demands of the small rural consumers at block, tehsil and taluka levels. Under this scheme 562 rural dealers were appointed during the Financial Year 2012-13.

· Process for further appointments is under progress. As on 1st April, 2013 SAIL has a wide network of 2896 dealers spread over 629 districts of the country.

· The Company maintained its presence in neighbouring and traditional markets and exported 0.368 million tonnes steel during the year. DSP Blooms and Chequered Coils were exported for the first time by the Company.

AWARDS AND ACCOLADES WON DURING THE YEAR

· The company has been conferred with "Excellent" Rating for the year 2011-12 for the 10th consecutive year.

· SAIL bagged SCOPE Award for Best Practices in Human Resource Management for the year 2011-12 presented by the Hon'ble President of India on Public Sector Day function held on 26th April'13.

· SAIL won 13 out of 28 Viswakarma Awards declared in the country, which is the highest for any organization amongst both private and public sector.

· SAIL employees were awarded 11 out of 32 Prime Minister's Shram Awards declared in the country. This is also the highest number for any organization amongst both private and public sector.

· Two out of the five Olympics medal winners of the country were supported by SAIL (Sushil Kumar and Yogeshwar Dutt). In recognition of SAIL's initiatives, Rashtriya Khel Protsahan Puraskar - 2012 was conferred to the Company by Hon'ble President of India.

· Indira Gandhi Rajbhasha Award for the best implementation of official language in 'A' (Hindi-speaking) region was conferred to SAIL. SAIL's Hindi magazine 'Ispat Bhasha Bharti' was also adjudged First prize winner amongst the in-house journals published in 'A' region in the country. These awards were conferred by Hon'ble President of India on Hindi Diwas i.e. 14th Sept'12.

· In the International Convention on Quality Circle 2012 held at Kuala Lumpur, Malaysia during 14th-17th October, 2012, all the six participating teams from SAIL won the highest honour (3-star awards) in their respective categories.

· SAIL was awarded CII - Sustainability Award 2012 [Certificate of Commendation], which was given by Hon'ble President of India on 14th January, 2013.

· Adjudged as most efficient and largest Maharatna employer at the Dalal Street Investment Journal PSU Awards-2012.

· SKOCH Financial Inclusion Award for 2013 for initiatives in corporate social responsibility.

· Institution of Engineers (India)- Industry Excellence Award -2012 under the award category A-"Manufacturing and Processing".

· Indira Gandhi Award (First prize) for excellence in implementation of Rajbhasha.

· 'Ispat Bhasha Bharti'- in-house Rajbhasha journal, won the first prize under the Home Ministry's All India House Journal Award Scheme.

· 'Sahasrabdi Rajbhasha Shield' from Rashtriya Hindi Academy, Rupambara, Kolkata.

· It is also noteworthy to mention that Chairman, SAIL was conferred SCOPE Award for Excellence and Outstanding contribution to the Public Sector Management - Individual Leadership Category-I (Maharatna/Navratna PSEs) for 2010-11.

BHILAI STEEL PLANT (BSP)

· Prime Minister's Trophy for the tenth time for emerging as the best performing steel plant in the country.

· Steel Minister's Trophy for the year 2010-11 and 2008-09.

· CII-ITC Sustainability Awards-2012 - Certificate of commendation for significant achievement in its category.

BOKARO STEEL PLANT (BSL)

· Greentech HR Awards 2013 (Gold) under the Category of Training Excellence.

· Golden Peacock National Training Award 2012 in steel sector for excellence in training practices.

· "Jharkhand CSR Award" in the category of "Regulation of Corporate Social and Environment Behaviour".

· 'Golden Peacock HR Excellence Award' for the year 2012.

DURGAPUR STEEL PLANT (DSP)

· Certificate of Strong Commitment to Excel from CII-EXIM Bank under Business Excellence Award.

· Rajiv Gandhi National Quality Award 2011 - Certificate of Commendation.

· Greentech Safety Award 2012 (Gold) and Greentech CSR Award 2012 (Silver) in Metal and Mining Sector.

· Greentech HR Award 2013 (Silver Trophy).

ROURKELA STEEL PLANT (RSP)

· Award for "Best Practices in Training and HRD-2012" from ISTD, Hyderabad Chapter.

· 'Greentech Environment Gold Award' in the field of eco-friendly steel making.

· Awards under three categories - Best CSR Practices, Concern for Health and Women Empowerment in the World CSR Day Global CSR Leadership and Excellence Awards.

RAW MATERIALS DIVISION (RMD)

· "No Fatal Accident in Collieries / Mines" Award by the Annual Joint Committee on Safety, Health and Environment (JCSSI).

· National Safety Awards (Mines) won by Kalta Iron Mine for Lowest Injury Frequency Rate and by Tulsidamar and Dalli mines for Longest Accident Free period.

ALLOY STEELS PLANT (ASP)

· Ispat Suraksha Puraskar from JCSSI for no fatalities for two consecutive years.

· Green Tech Environment Excellence (Silver) Award 2012.

SALEM STEEL PLANT (SSP)

· Award for "Excellence in Suggestion Scheme 2012" from INSSANSIC.

· National Sustainability Award (First Prize) for the year 2011-12 from IIM, Kolkata amongst the Secondary Steel Plants / Alloy Steel Plants category.

RDCIS

· Golden Peacock Innovation Management Award for the year 2012.

BUSINESS EXCELLENCE – INITIATIVES

ENTERPRISE SCORECARD (ESC)

Enterprise Scorecard (ESC) of SAIL was prepared for the Financial Year 2012-13. Enterprise Scorecard not only brought integration with Memorandum of Understanding (MoU) with Government of India and Annual Business Plan (ABP) of the Company but also facilitated deployment of these across various leadership levels. It facilitated deployment of organisational strategy through Strategic Objectives and Key Initiatives. ESC 2012-13 was aligned upwards with ABP and MOU; deployed downwards through Unit Scorecards, Functional Scorecards and Departmental Scorecards and addressed the long term and short term issues. Process for formulation of Enterprise Scorecard for 2013-14 has also been commenced.

EXCELLENCE MODEL

The Company has adopted European Foundation of Quality Management (EFQM) Model which is implemented in India through CII EXIM Bank Award for Business Excellence. Four SAIL plants i.e. BSP, DSP, BSL and RSP participated for CII-EXIM Bank Award for Business Excellence 2012. Three of these plants i.e. BSP, DSP and RSP got following Recognition awards:

· BSP - Commendation award for Strong Achievement

· DSP - Commendation award for Strong Commitment to Excel

· RSP - Commendation award for Strong Commitment to Excel

TOTAL QUALITY MANAGEMENT (TQM)

Most of their Plants and Units are certified to ISO 9000, ISO 14000, OHSAS 18000 and SA 8000 Management Standards. During the financial year 2012-13, RSP was certified to Social Accountability Standard (SA 8000) and DSP was certified to Information Security Standard (ISO 27000).

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

INDUSTRY STRUCTURE and DEVELOPMENTS

WORLD ECONOMIC ENVIRONMENT

According to IMF, World economic output declined to 3.2% in 2012 from 4% in 2011. In its latest World Economic Outlook update, IMF projects a 3.3% growth for 2013. The mild recovery in 2013 would be supported mainly by emerging markets and developing economies, while growth in advanced economies would remain flat.

Growth in the advanced economies shrunk from 1.6% in 2011 to 1.2% in 2012, mainly on account of the Euro area which is in the midst of an economic crisis. Economic output growth in the Euro area was (-) 0.6% in 2012 and is projected to remain subdued at (-) 0.3% in 2013. USA showed signs of recovery with 2.2% growth in 2012 from 1.8% in 2011. Overall, growth in the advanced economies in 2013 will remain flat at 1.2% as projected by IMF.

The emerging and developing economies also experienced lower growth of 5.1% in 2012 as against 6.4% in 2011. China which had grown at 9.3% in 2011 slowed down to 7.8% in 2012, but is expected to recover to 8% in 2013. Brazil is expected to bounce back to 3% growth in 2013, from 0.9% in 2012. Russia recorded 3.4% growth in 2012 as compared to 4.3% in 2011. For 2013, IMF projects 5.3% growth for the developing and emerging economies.

Economic slowdown impacted world trade growth which slowed down to 2.5% in 2012 in comparison to 6% in 2011. However, a recovery to 3.6% is expected in 2013 with imports and exports projected to pick up in emerging as well as advanced economies.

WORLD STEEL SCENARIO

World crude steel production grew at 0.7% reaching 1547 Million Tonnes (MT) in 2012, as per World Steel Association (WSA). The growth in production, coming mainly from Asia and North America, was considerably subdued as compared to 7.3% growth in 2011. Japan, the second largest steel producer in the world, after China, recorded negative 0.4% growth in crude steel production in 2012 over 2011. US produced 88.7 MT of crude steel in 2012, growing at 2.7% over 2011. Of the BRIC nations, only Brazil recorded a decline in crude steel production in 2012 at (-) 2%; Russian and Indian crude steel production grew by 2.2% and 5.6% respectively. China accounted for 46% of the world's total crude steel production in 2012, reaching 716.5 MT, an increase of 2% over 2011. The European Union saw crude steel production decline by (-) 4.7% in 2012 to 169 million tonnes.

As per WSA estimates the global steel demand during 2012 grew by around 1.2% to 1413 million tonnes, moderating from a 7.3% growth in 2011. It is expected to grow by around 3% to 1454 million tonnes in

2013.

INDIAN ECONOMIC ENVIRONMENT

The Indian economy is going through a rough phase with GDP growth moderating to 5% in the financial year 2012-13 as per CSO provisional estimates. Of primary concern are the Fiscal Deficit, which although contained at 5.1% for the financial year 2012-13, is still on the higher side, and the Current Account Deficit (CAD). Inflation also remained on the higher side. Industrial activity has been sluggish, growth in manufacturing has declined further to 1% in the financial year 2012-13 while construction remained moderated at 4.3%.

In the Union Budget 2013, the Finance Minister has laid emphasis on the need for 'sustainable growth' backed by increase in domestic and foreign investments. Measures such as investment allowance of 15% on investment of Rs.1000.000 Millions or more on plant and machinery, plan for seven new cities on Mumbai-Delhi industrial corridor and two new industrial corridors from Chennai to Bangalore and from Bangalore to Mumbai, and the plan to develop two new ports in West Bengal and Andhra Pradesh will have ripple effects for heightened industrial activity, and consequently boost steel demand.

The measures envisaged in the Union Budget particularly for infrastructure sector augur well for the steel industry.

INDIAN STEEL SCENARIO

India maintained its ranking as the 4th largest steel producer in the World (after China, Japan and USA) with a production of 77.6 million tones (estimated figures) of crude steel in 2012, registering a growth rate of 5.6% over 2011. The country has also been the largest sponge iron producer in the world since 2002.

Finished steel demand in India, as per JPC estimates, softened as reflected in a 3.3% growth in real consumption of finished steel during the financial year 2012-13 to 73.3 million tonnes. The moderation in demand was mainly due to deteriorating global and domestic growth conditions. Finished steel production for the financial year 2012-13 at 77.6 million tonnes (JPC provisional figures), shows a growth of 2.5% over the previous year.

The future outlook for the Indian steel industry is optimistic. The World Steel Association has forecast a steel demand growth of 5.9% and 7% for 2013 and 2014 respectively, which is higher than the growth projected for developed countries and China.

OUTLOOK

· The Government plans to invest around Rs.50 lakh crore (~USD 0.83 trillion) in development of physical Infrastructure during 12th Five Year Plan (2012-13 to 2016-17). This will propel growth of the Infrastructure and Construction sector, which will in turn increase steel demand.

· Union Budget 2013 lays down plans for seven new cities on Mumbai-Delhi industrial corridor and two new industrial corridors from Chennai to Bangalore and from Bangalore to Mumbai, and the plan to develop two new ports in West Bengal and Andhra Pradesh. This will have ripple effects for heightened industrial activity, and consequently boost steel demand.

· India's current per capita finished steel consumption at 57 kg is well below the world average of 217 kg. With rising Income levels expected to make steel increasingly affordable, there is vast scope for increasing per capita consumption of steel.

STATEMENT OF STANDALONE UNAUDITED FINANCIAL RESULTS FOR THE QUARTER AND NINE MONTHS ENDED 31ST DECEMBER, 2013

(RS. IN MILLIONS)

Sl. No	Particulars	Quarter ended		Nine Months ended
Sl. No	Particulars	31st Dec 2013	30th Sept 2013	31st Dec 2013
		(Unaudited)	(Unaudited)	(Unaudited)
1	(a) Net Sales / Income from operations i) Gross Sales	127162.800	128019.900	368794.100
		0.000	0.000	0.000
	ii) Less : Excise Duty Subtotal (a) (i-ii)	13535.800	13921.200	40007.200
	ii) Less : Excise Duty Subtotal (a) (i-ii)	113627.000	114098.700	328786.900
2	(b) Other operating income	960.200	1144.000	3452.500
	Total Income from Operations (net)	114587.200	115242.700	332239.400
	Expenses a) Changes in Inventories of Finished Goods, Work in Progress and Stock-in-Trade	(3738.900)	4555.100	(5293.600)
	b) Cost of Materials Consumed	50818.100	46924.800	144415.800
	c) Purchase of Stock in Trade	0.700	2.900	6.400
		0.000	0.000	0.000
	d) Employee Benefits Expense	22678.000	24954.300	70580.200
	e) Power & Fuel	12298.300	12976.800	36800.800
	f) Depreciation and Amortisation Expenses	4087.400	3988.000	12003.900
	g) Other Expenses	21211.200	17272.300	56450.500
	Total Expenses	107354.800	110674.200	314964.000

3	Profit from Operations before Other Income, Finance Costs and Exceptional Items ( 1-2)	7232.400	4568.500	17275.400
4
4	Other Income i) Interest Earned	1489.800	1501.000	4278.100
	ii) Other Income	598.200	138.500	1980.700
	Subtotal (i+ii)	2088.000	1639.500	6258.800

5 6	Profit from ordinary activities before Finance Costs and Exceptional Items ( 3+4)	9320.400	6208.000	23534.200
	Finance Cost	2467.700	2164.800	6550.700

7 8	Profit from ordinary activities after Finance Costs but before Exceptional Items ( 5-6)	6852.700	4043.200	16983.500
7 8	Exceptional items Foreign Exchange Loss (-)/ Gain(+)	199.200	(681.400)	(1361.000)
9 10	Compensation Received for Non-Performance of Contract.	0.000	10562.600
	Profit from Ordinary Activities before Tax ( 7+8)	7051.900	13924.400	26185.100
	Tax Expense (a) Current Tax	1391.800	2887.100	5357.900
	(b) Deferrred Tax Liability / Assets ( - )	294.100	2112.400	3106.200
	(c) MAT Credit	40.000	(2887.100)	(3926.100)
	(d) Earlier Years	0.000	8.100	8.100
	Sub-Total ( a to d )	1725.900	2120.500	4546.100

11	Net Profit from Ordinary Activities after Tax ( 9-10 )	5326.000	11803.900	21639.000
12	Extraordinary Items (net of Tax Expense Rs. Nil)	0.000	0.000	0.000
13	Net Profit for the Period (11-12)	5326.000	11803.900	21639.000
14	Paid up Equity Share Capital ( Face value : Rs. 10 per share )	41305.300	41305.300	41305.300
15	Reserves (Excluding Revaluation Reserve ) as per Balance Sheet of Previous Accounting Year			0.000
16	Basic and Diluted Earnings per Share (of Rs.10/- each) before and after Extraordinary Items ( Not Annualised ) ( Rupees )	1.29	2.86	5.24

Sl. No	Particulars	Quarter ended		Nine Months ended
Sl. No	Particulars	31st Dec 2013	30th Sept 2013	31st Dec 2013
		(Unaudited)	(Unaudited)	(Unaudited)
A	PARTICULARS OF SHAREHOLDING
1	Public share holding
	- Number of shares	82,57,77,391	82,57,77,391	82,57,77,391
	- Percentage of share holding	19.99	19.99	19.99
2	Promoters and Promoter group shareholding (a) Pledged / Encumbered - Number of Shares
	- Percentage of shares (as a % of the total shareholding of the promoter and promoter group)
	- Percentage of shares (as a % of the total share capital of the company)
	(b) Non-Encumbered
	- Number of Shares	330,42,93,713	330,42,93,713	330,42,93,713
	- Percentage of shares (as a % of the total shareholding of the promoter and promoter group)	100.00	100.00	100.00
	- Percentage of shares (as a % of the total share capital of the company)	80.00	85.82	80.00

	Particulars	Quarter ended 31st Dec 2013
B	INVESTOR COMPLAINTS Pending at the beginning of the quarter	1
	Received during the quarter	9
	Disposed off during the quarter	10
	Remaining unresolved at the end of the quarter	0

NOTES TO FINANCIAL RESULTS

1) The above results have been reviewed by the Audit Committee and taken on record by the Board of Directors in their respective Meetings held on 14th February, 2014.

2) The above results have been reviewed by the Statutory Auditors, as required under Clause 41 of the Listing Agreement.

3) The Board of Directors, in its meeting held on 14th February, 2014, have approved interim dividend of Rs.2.02/- per equity share for the Financial Year 2013-14. The record date for payment of Interim Dividend has been fixed as 20th February, 2014.

4) Net Sales include sales to Government Agencies recognised on provisional contract prices during the Nine Months ended 31st December, 2013: Rs.24728.300 millions (corresponding Nine Months of previous year: Rs. Rs.31850.700 millions) and cumulatively upto 31st December, 2013: Rs.207165.400 millions (upto the corresponding Nine Months previous year : Rs.175184.400 millions).

a) After expiry of long term wage agreement with non-executive employees on 31st December, 2011, the Company has entered into a Memorandum of Understanding with the Unions, for implementation of wage revision of non-executives w.e.f. 1st January, 2012. Employee Benefits Expense for the quarter/nine months ended 31st December, 2013 are inclusive of wage revision arrears of non-executives upto 31st March, 2013, amounting to Rs.3394.800 millions on estimated basis. Further, the wage revision arrears of Rs.7085.500 millions have been charged to Employee Benefits Expense for the nine months ended 31st December, 2013.

b) On review, an amount of Rs.2027.000 millions in Employee Benefits Expense (EBE) and Rs.97.200 millions in Expenditure during construction (EDC) upto 31st March, 2013 and Rs.265.300 millions in EBE and Rs.16.500 millions in EDC for the half year ended 30th September, 2013, excess provided in respect of other benefits for executives, has been written back during the current quarter/nine months.

6) The auditors in their limited review report for the half year ended 30th September, 2013 have brought out that the Company has not provided for:

a) Entry tax amounting to Rs.829.100 millions in the state of Uttar Pradesh, Rs.9763.400 millions in the state of Chhatisgarh and Rs.2046.300 millions in the state of Odisha;

b) Income tax demand of Rs.876.200 millions;

c) Claims of Rs.2538.400 millions by DVC for supply of Power;

The Management’s view on the above mentioned points is that these cases are sub-judice and pending for adjudication before the Hon’ble Supreme Court. The disputed demands, contested on valid and bonafide grounds, have been disclosed as contingent liabilities as it is not probable that present obligations exist as on 31st December, 2013. Therefore, there is no adverse impact on profit. These cases were sub-judice as on 31st March, 2012 also and there is no change in the status of these cases till date.

7) In accordance with Companies (Accounting Standards) Amendment Rules, 2009, relating to Accounting Standard – 11, notified on 31st March 2009 and amended from time to time, the foreign exchange fluctuation loss on long-term foreign currency loans of Rs.4510.100 millions (net debit) for the current Nine Months [corresponding Nine Months of previous year- Rs.1890.100 millions (net debit)], has been adjusted in the carrying cost of the Fixed Assets/Capital Work-in-progress.

8) The figures of previous periods have been re-grouped, wherever necessary, so as to conform to the current Quarter/Nine Months classification.

CONTINGENT LIABILITIES:

PARTICULARS	31.03.2013	31.03.2012
	(Rs. in millions)
(i) Claims against the Company pending appellate/judicial decisions :
a) Excise Duty	11207.300	19254.700
b) Sales Tax on inter-state stock transfers from plants to stockyards*	7409.400	7619.100
c) Other sales tax matters	1721.900	1539.100
d) Income Tax	7973.000	5186.800
e) Other duties, cess and levies	21518.200	6458.800
f) Civil matters **	8316.100	4909.400
g) Entry Tax	11661.800	9095.700
h) Miscellaneous **	4494.100	3659.100
* No liability is expected to arise, as sales tax has been paid on eventual sales. ** includes claims of Rs. 225.400 Millions (Rs.241.400 Millions), against which there are counter-claims of Rs.184.100 Millions (Rs.184.100 Millions).

(ii) Other claims against the Company not acknowledged as debt:
a) Sales Tax	173.200	103.800
b) Duties, cess and levies	2503.800	1154.700
c) Civil Matters	230.300	222.000
d) Miscellaneous $	54987.100	6724.100
$ includes claims of Rs.1009.400 Millions (Rs.731.600 Millions), against which there are counter-claims of Rs.1039.500 Millions (Rs.624.200 Millions).

(iii) Disputed income tax/service tax/other demand on joint venture Company for which Company may be contingently liable under the joint venture agreement	293.300	361.900

(iv) Bills drawn on customers and discounted with banks	668.900	1109.500

(v) Price escalation claims by contractors/suppliers and claims by certain employees, extent whereof is not ascertainable	--	--

FIXED ASSETS:

Tangible Assets

· Freehold Land

· Leasehold Land

· Buildings

· Plant and Machinery

· Steel Plant

· Furniture and Fittings

· Vehicles

· Office Equipments

· Miscellaneous Articles

· Roads, Bridges and Culverts

· Water Supply and Sewerage

· EDP Equipments

· Railway Lines and Sidings

Intangible Assets

· Computer Software

· Mining Rights

PRESS RELEASE

SEBI WANTS 25% PUBLIC HOLDING AT PSUS TOO; GOVT TO DECIDE

After ensuring minimum 25 percent public shareholding at private sector listed companies, market regulator Sebi is contemplating similar norms for PSUs, but a final decision would be taken as per views of the new government at the Centre. There are close to 30 listed PSUs where public investors hold less than 25 percent stake, while the existing norms require a minimum public holding of only 10 percent for them. The Securities and Exchange Board of India (Sebi), which regulates all listed companies, has suggested to the Finance Ministry an increase in minimum public shareholding in listed Public Sector Undertakings (PSUs) as part of its efforts to deepen the markets and increase public float, official sources said.

However, a final decision in this regard can be taken only after getting the views of new Finance Minister Arun Jaitley, who took charge of his office yesterday.

The market watchdog is of the view that the PSUs can be given a three-year time period for meeting the new limits, sources said, while adding that the move would also help in promoting wider participation from investors and boost government's plan of raising funds through disinvestment.

A similar time frame was given to private sector companies in 2010 to achieve minimum 25 percent public holding, while PSUs were also given three years in the same year to increase their public shareholding to at least 10 percent.

The deadline for 25 percent minimum public shareholding requirement for private companies ended in June 2013, while the same for the government to reduce its stake to at least 90 percent in PSUs was August 2013. When the norms were proposed in 2010, more than 200 companies needed to comply.

Incidentally, Sebi had first proposed in June 2010 that all listed companies -- including PSUs -- would need to have a minimum public shareholding of 25 percent.

However, in August 2010, the norms were amended to revise public sector companies' minimum public shareholding norms to 10 percent (from 25 percent) within three years.

Sebi had taken action against 105 private companies, their promoters and directors for failing to achieve the 25 percent public float within the stipulated period.

These directions issued by Sebi against these firms included freezing of voting rights and corporate benefits such as dividend , rights, bonus shares and split of the promoters or promoter group of the non-compliant companies with respect to the excess of proportionate shareholding in respective companies.

Almost all PSUs had managed to meet the guideline before the end of the August deadline. However, the regulator had allowed the government to transfer its holding in excess of 90 percent in sick PSUs to Special National Investment Fund.

SAIL Q4 NET UP 1.5%, OPERATIONAL PERFORMANCE DISAPPOINTS

State-owned steel maker Steel Authority of India (SAIL) disappointed street with the fourth quarter net profit rising 1.5 percent year-on-year to Rs 4530.000 Millions, impacted by weak operational performance.

According to CNBC-TV18 poll estimates, analysts had expected net profit of Rs 8400.000 Millions on total income of Rs 132129.000 Millions for the quarter.

Total income grew 10 percent to Rs 135090.000 Millions in the quarter ended March 2014 from Rs 122847.000 Millions in same quarter last year.

Operating profit increased 39 percent on yearly basis to Rs 12210.000 Millions and margin expanded 210 basis points to 9 percent in the quarter gone by, which both were lower than analysts' forecast of Rs 16000.000 Millions and 12.1 percent, respectively.

Other income of the company fell 31 percent year-on-year to Rs 1751.000 Millions while finance cost increased 45 percent to Rs 3120.000 Millions during January-March quarter. SAIL during the quarter received minimum alternate tax credit of Rs 1270.000 Millions.

The stock closed at Rs 89.35, down 4.59 percent on the Bombay Stock Exchange.

TRIM PSU STAKES; BOOST PRODUCTION: STEELMIN TO NEW GOVT

Diluting PSUs' stake to 51 percent, ensuring raw material security to steel makers and steps to boost production are among a dozen suggestions by the Steel Ministry for the new government.

In a presentation for the Cabinet Secretary, the ministry suggested that the new government should bring down stakes in steel PSUs to 51 percent and utilise the proceeds for development.

The presentation comes ahead of Narendra Modi led BJP government taking charge on Monday. Steel Authority of India (SAIL), Rashtriya Ispat Nigam (RINL), iron ore miner NMDC Limited, manganese ore producer MOIL Limited and pellet maker KIOCL Limited are the major PSUs under the administrative control of the Steel Ministry.

Government has 80 per cent stake each in SAIL, NMDC and MOIL. RINL and KIOCL are yet to be listed. It can rake in a whole lot of funds by pruning its stakes down to 51 per cent in these companies.

The ministry has also suggested that there is a need to reform the current raw material policy and allot captive mines to steel producers so that they meet at least half of their long-term requirements.

There is also a need to introduce single-window mechanism for streamlining the allocation of raw materials.

It was also stated that there is need to create "special mining zones through a special legislation and prepare comprehensive environment, forest management plans for areas declared to be bearing raw material like iron ore and coal".

The ministry also suggested that initiatives should be taken to raise country's steel production capacity to 300 million tonnes per annum (mtpa) within the next 10 to 15 years from around 100 mtpa now.

To achieve this goal, special purpose vehicles should be created in collaboration with state governments to fast track land acquisition and statutory clearances, it said.

In line with power sector, which is entitled to duty-free imports of gas, steel sector should also be allowed to import critical raw material like iron ore, natural gas and scrap without any duty, officials said.

The ministry also pitched for creation of a National Institute of Steel either as a university or deemed university for meeting technical manpower requirement of the steel industry and for nurturing research and development initiatives.

ODISHA MINING BAN 'DISASTROUS' FOR STEEL COS: KALYANI

The Supreme Court’s decision ban mining in some 26 mines in Odisha – due to non renewal of leases – will reduce domestic availability of iron ore by about 40 million tonne, RK Goyal, managing director of Kalyani Steel , told CNBC-TV18’s Latha Venkatesh and Ekta Batra in an interview.

The total iron ore mined last year was around 130 million tonne, out which around 13-14 million tonnes were exported, Goyal said.

“[Local] availability of iron ore is only 110-115 million tonnes,” he said. “And if 40 million tonnes goes out of this, it will be a big disaster for the steel industry.”

Companies such as Tata Steel and SAIL may try to source iron-ore from international sources, Giriraj Daga of Nirmal Bang Securities said, adding that NMDC will be a key beneficiary of the scarcity of iron ore.

Below is the edited transcript of the interview on CNBC-TV18.

Latha: How does this change the terrain for you, was a lot of iron ore coming out of Odisha, will it become expensive for you now that maybe even Tata Steel and Steel Authority of India (SAIL) will be buying from the market?

Goyal: Total availability of iron ore in the domestic market will go down and it is estimated the production of these 26 mines was close to 40 million tonnes. So if this 40 million tonnes comes down, it will definitely affect everybody.

In Karnataka, some companies were definitely sourcing some iron ore from Orissa but if 40 million tonnes availability goes down in Odisha, people will try to buy from various other places including from Karnataka. So a reverse movement is also possible and in the process the prices will could become speculative and go up.

Latha: This 40 million tonnes is out of total in the country of how much?

Goyal: Total iron ore mined this year may be around 130 million tonne. Out of this around 13-14 million tonnes were exported. So availability of iron ore is only 110-115 million tonnes. And if 40 million tonnes goes out of this, it will be a big disaster for the steel industry.

Ekta: What sort of spike do you expect in terms of iron ore prices as well as steel prices even though it might be temporary?

Goyal: It is very difficult to say right now because a lot of imports will start coming in into the country. It also depends whether we are able to pass on this increase to the customers. But as far as iron ore part is concerned I expect a substantial increase in the prices.

Ekta: Your view on Tata Steel and SAIL?

Daga: The news is surely negative but the company during the normal course of business has somewhere near 40-45 days of inventory including plant transportation and mine as well. And if I read the Supreme Court order, they have said that the companies with the first deemed renewal can be allowed to operate and we were bit surprised to look at the Tata Steel in the first deem renewal. It is in the second or third renewal but that is not a deemed renewal.

So if things move around in one-two months with the inventory post that, the company might have to come to market or they will have to utilize the dumps inventory because mines are running from decades so they might have some dumps inventory also.

We are possibly looking at a 5-7 percent kind of a downgrade in the FY15 EBITDA number but we are not seeing much happening on FY16 because SC has told that things will be cleared in next six months.

Latha: So your anticipation is that the next auction that the Goyal was speaking about will not see higher prices?

Daga: That is very difficult because immediately there is no requirement and getting ore from Karnataka and transportation cost, the company might as well look to imports also because the port is near. So I will not be surprised if there is no surprise on Karnataka companies because there are many other options. As I said dumps inventory can also be utilised.

Latha: So in the entire iron and steel space what are your buys and sells?

Daga: We are positive on National Mineral Development Corporation (NMDC) which is also a beneficiary under the right condition and we are positive on Sesa Sterlite because it has multiple levers.

On the steel sector we are reviewing our position not because of Odisha ore but because of election and the changing demand outlook. So we have changed our GDP estimate also. We are running positive on steel stocks as well.

Kalyani Steels stock price

On June 02, 2014, at 13:39 hrs Kalyani Steels was quoting at Rs 94.80, up Rs 4.30, or 4.75 percent. The 52-week high of the share was Rs 96.65 and the 52-week low was Rs 31.00.

The company's trailing 12-month (TTM) EPS was at Rs 13.42 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 7.06. The latest book value of the company is Rs 94.64 per share. At current value, the price-to-book value of the company is 1.00.

CMT REPORT (Corruption, Money Laundering and Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.59.03
UK Pound	1	Rs.98.91
Euro	1	Rs.80.34

INFORMATION DETAILS

Information Gathered by :	GYT

Analysis Done by :	SUB

Report Prepared by :	VRN

SCORE and RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	8
OPERATING SCALE	1~10	9
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	9
--LIQUIDITY	1~10	9
--LEVERAGE	1~10	8
--RESERVES	1~10	9
--CREDIT LINES	1~10	8
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	YES
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTERS
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		77

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial and operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
-	NB	New Business	-

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.

MIRA INFORM REPORT

137423.700

113027.900

47613.200

41302.700

64157.000

174800.900

21670.000

24142.500

33891.700

29376.300

304755.600

382650.300

31904.200

31865.400

94049.800

58222.300

58751.300

187840.100

184666.500

116915.500

197983.800

4.76

7.27

6.81

0.08

0.52

1.23

Unit